Yes, hell has frozen over. Newsweek allowed Harvard’s Niall Ferguson to write their cover story this week, and that’s exactly the argument Ferguson makes. This is a long, well-written article and you really need to read the whole thing. Here’s an excerpt to whet your appetite:
Not only did the initial fiscal stimulus fade after the sugar rush of 2009, but the president has done absolutely nothing to close the long-term gap between spending and revenue.
His much-vaunted health-care reform will not prevent spending on health programs growing from more than 5 percent of GDP today to almost 10 percent in 2037. Add the projected increase in the costs of Social Security and you are looking at a total bill of 16 percent of GDP 25 years from now. That is only slightly less than the average cost of all federal programs and activities, apart from net interest payments, over the past 40 years. Under this president’s policies, the debt is on course to approach 200 percent of GDP in 2037—a mountain of debt that is bound to reduce growth even further.
And even that figure understates the real debt burden. The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues—what economist Larry Kotlikoff calls the true “fiscal gap”—is $222 trillion.
The president’s supporters will, of course, say that the poor performance of the economy can’t be blamed on him. They would rather finger his predecessor, or the economists he picked to advise him, or Wall Street, or Europe—anyone but the man in the White House.
There’s some truth in this. It was pretty hard to foresee what was going to happen to the economy in the years after 2008. Yet surely we can legitimately blame the president for the political mistakes of the past four years. After all, it’s the president’s job to run the executive branch effectively—to lead the nation. And here is where his failure has been greatest.
On paper it looked like an economics dream team: Larry Summers, Christina Romer, and Austan Goolsbee, not to mention Peter Orszag, Tim Geithner, and Paul Volcker. The inside story, however, is that the president was wholly unable to manage the mighty brains—and egos—he had assembled to advise him.
According to Ron Suskind’s book Confidence Men, Summers told Orszag over dinner in May 2009: “You know, Peter, we’re really home alone … I mean it. We’re home alone. There’s no adult in charge. Clinton would never have made these mistakes [of indecisiveness on key economic issues].” On issue after issue, according to Suskind, Summers overruled the president. “You can’t just march in and make that argument and then have him make a decision,” Summers told Orszag, “because he doesn’t know what he’s deciding.” (I have heard similar things said off the record by key participants in the president’s interminable “seminar” on Afghanistan policy.)
Again, you really need to read the entire piece. It’s eye-opening. I still can’t believe it was published in the same liberal rag whose editor famously declared in 2009 that Obama was like God of the world or something, . If Obama can’t count on Newsweek to obediently serve the Kool-aid 24/7, he’s got real problems.